Protection of Stratospheric Ozone
[Federal Register: October 14, 1994]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 82 [FRL-5087-6]
Protection of Stratospheric Ozone
AGENCY: Environmental
Protection Agency. ACTION: Proposed rule.
SUMMARY: This document proposes to allocate potential production allowances
to producers who have baseline allowances for the production of methyl bromide.
These potential production allowances would be intended solely for the production
of methyl bromide for export to Article 5 countries, as defined under Article
5 of the Montreal Protocol on Substances that Deplete the Ozone Layer. In
drafting the accelerated phaseout rule, which was published in the Federal
Register on December 10, 1993, the Agency inadvertently omitted methyl bromide
from the list of chemicals for which potential production allowances were
granted. Today's action proposes an allocation of potential production allowances
for all control periods beginning January 1, 1994, and ending before January
1, 2001, equal to 10 percent of a company's baseline production allowances.
The Agency may propose potential production allowances for methyl bromide
for control periods after January 1, 2001, at a later date.
DATES: Written comments on this proposed rule must be received on or
before November 14, 1994, unless a public hearing is requested. In the
case where a public hearing is requested, the public hearing will be scheduled
on October 31, 1994. Comments must then be received on or before 30 days
following the public hearing. Any party requesting a public hearing must
notify the contact person listed below by October 24, 1994. Inquiries
regarding a public hearing should be directed to the Stratospheric Ozone
Information Hotline at 1-800-296-1996.
ADDRESSES: Comments on this proposed rulemaking should be submitted
in duplicate (two copies) to: Air Docket No. A-92-13, U.S. Environmental
Protection Agency, 401 M Street, SW., room M-1500, Washington, DC 20460.
Materials relevant to this proposed rulemaking are contained in Docket
No. A-92-13. The Docket is located in room M-1500, First Floor, Waterside
Mall at the address above. The materials may be inspected from 8 a.m.
until 4 p.m. Monday through Friday. A reasonable fee may be charged by
EPA for copying the docket.
FOR FURTHER INFORMATION CONTACT: Tom Land, Program Implementation Branch,
Stratospheric Protection Division, Office of Atmospheric Programs, Office
of Air and Radiation (6205J), 401 M Street, SW., Washington, DC 20460,
(202) 233-9185. The Stratospheric Ozone Hotline at 1-800-296-1996 can
also be contacted for further information.
I. Background
When Parties to the Montreal Protocol on Substances that Deplete the
Ozone Layer (the Protocol) first met in 1987, they agreed to allow additional
production of controlled substances for developing countries beyond the
levels being set for the developed countries. The United States, as well
as other Parties to the Protocol, recognized the need to continue to supply
controlled substances to developing countries during the period of scheduled
reductions and for a limited time after the phaseout of production of
controlled substances. In Article 2H of the Protocol, the Parties agreed
to allow production after the phaseout occurred. Under Article 5 of the
Protocol, developing countries are defined as Parties to the Protocol
consuming less than 0.3 kilograms per capita of class I, Group I and II
controlled substances. These Article 5 countries have limited resources
to adopt alternative technologies to replace the phased out controlled
substances. To ensure that such countries do not purchase the technologies
to produce controlled substances and otherwise bypass controls on controlled
substances, the Parties to the Protocol agreed to provide a set-aside
level of production for Article 5 countries. Article 5 countries must
ensure that these imported controlled substances are used to meet basic
domestic needs.
The Environmental Protection Agency (EPA) implements a program domestically
that limits and monitors production and consumption of controlled substances,
including methyl bromide. Production for Article 5 countries in the United
States is monitored by allocating potential production allowances to those
companies that have baseline production allowances. Since 1989, EPA has
allocated potential production allowances equal to 10 percent of baseline
production allowances for specific controlled substances. Upon the complete
phaseout of a controlled substance, and until 10 years after the phaseout,
companies are allocated up to 15 percent of their production baseline
for export to Article 5 countries. EPA grants authorization to convert
potential production allowances to production allowances to producers
once they have exported to an Article 5 country. The July 30, 1992 Federal
Register document (57 FR 33754) as well as the December 10, 1993 Federal
Register document (58 FR 65018) explain these controls, as well as the
recordkeeping and reporting required for such transactions. The specific
provisions governing production for, and export to, Article 5 countries
are in Secs. 82.9 and 82.11. Appendix D of subpart A of 40 CFR part 82
contains a listing of Article 5 countries.<SUP>1
\1\EPA is drafting proposed amendments to the accelerated phaseout rule
that will make minor adjustments to the provisions for exports to Article
5 countries.
II. Need To Allocate Methyl Bromide Production Allowances
In the December 10, 1993 publication of the accelerated phaseout (58
FR 65018) adding methyl bromide to list of class I controlled substances,
the Agency inadvertently neglected to also allocate potential production
allowances for methyl bromide. At the time of proposal, the Agency focused
on the level of control of methyl bromide and its phaseout, but inadvertently
failed to propose additional production of methyl bromide for Article
5 countries. Due to this oversight, EPA is proposing through this Notice
to grant potential production allowances to methyl bromide producers equal
to 10 percent of their baseline allowances beginning in the current control
period (which began January 1, 1994). As with other controlled substances,
the 10 percent level of production for Article 5 countries would continue
until the effective date of the phaseout of production of the substance,
in this case, until January 1, 2001, for methyl bromide. Section 602(d)
of the CAA establishes the phaseout date for methyl bromide by stating
that production may not extend beyond, ``a date more that seven years
after January 1 of the year after the year in which the substance is added
to the list of class I substances.'' With this proposal, EPA is reserving
action in allocating potential production allowances for control periods
starting with January 1, 2001, and beyond.
III. Legal Authority
EPA believes that it has the authority, under both the Montreal Protocol
and Section 604 (e) of the Clean Air Act Amendments of 1990 (CAA) to allow
increased production of methyl bromide for export to Article 5 countries
for the control periods from 1994 to the end of 2000. The Parties to the
Protocol, in the Fourth Meeting in Copenhagen, agreed to list methyl bromide
as a class I substance. The CAA requires EPA to phase out any newly-listed
substances seven years after January 1 of the year following the year
in which the chemical was listed. In following the mandate of the CAA,
methyl bromide is phased out in the United States by January 1, 2001.
The December 10, 1993 final rule incorporates such a phaseout of methyl
bromide and on December 30, 1993, EPA allocated baseline production and
consumption allowances for methyl bromide.
Both the Protocol and the CAA allow persons with baseline production allowances
to produce an additional 10 percent for export to Article 5 countries.
As discussed earlier, in Article 2H of the Protocol, the Parties agreed
to permit continued production of up to 10 percent of baseline levels
of controlled substances for export to Article 5 countries. The CAA also
authorizes continued production for such purposes. CAA section 604(e)
(Developing Countries) states: (1) Exception.--Notwithstanding the phase-out
and termination of production required under subsections (a) and (b),
the Administrator, after notice and opportunity for public comment may,
consistent with the Montreal Protocol, authorize the production of limited
quantities of a class I substance in excess of the amounts otherwise allowable
under subsection (a) or (b), or both, solely for export to, and use in,
developing countries that are Parties to the Montreal Protocol and are
operating under article 5 of such Protocol. Any production authorized
under this paragraph shall be solely for purposes of satisfying the basic
domestic needs of such countries. (2) Cap on Exception.--(A) Under no
circumstances may the authority set forth in paragraph (1) be applied
to authorize any person to produce a class I substance in any year for
which a production percentage is specified in Table 2 of subsection (a)
in an annual quantity greater than the specified percentage, plus an amount
equal to 10 percent of the amount produced by such person in the baseline
year. Section 604(e)(1) authorizes the production of limited quantities
of a class I substance in excess of the amounts otherwise allowable ``under
subsection (a) or (b).'' In the case of methyl bromide, the production
reductions and phaseout schedules listed in subsection (a) and (b) have
been modifed according to section 602(d) to require a freeze at 1994 production
levels for methyl bromide until January 1, 2001, at which time methyl
bromide may no longer be produced. Thus, sections 604(e)(1) & (2),
as applied to methyl bromide, authorize additional production equal to
1012f 1994 baseline allowances solely for export to Article 5 countries
until the year in which methyl bromide is phased out.
The Clean Air Act Amendments anticipated the need to continue to supply
controlled substances to Article 5 countries despite the freeze and the
eventual elimination of production and consumption of these chemicals.
Section 604(e) allows for this production, provided it is consistent with
the Montreal Protocol. Accordingly, EPA allocated potential production
allowances for class I substances in the December 10, 1993 final rule.
The authority to allocate such allowances applied to the newly-listed
methyl bromide. However, due to an oversight, methyl bromide was not included
in the list of chemicals for which potential production allowances were
granted.
IV. Proposed Production Levels
EPA proposes that companies that produced methyl bromide in 1991 be
allowed to produce up to 10 percent of their baseline allowances for Article
5 countries for the control periods starting January 1, 1994, and ending
before January 1, 2001. EPA is setting the level at 10 percent to be consistent
with Article 2H of the Montreal Protocol, and to be consistent with the
approach used for all Class I controlled substances except for Group VII,
the hydrobromofluorocarbons (no additional production for Article 5 countries
is granted under the Protocol for these chemicals).
Although EPA considered setting the level of additional production at
less than 10 percent, EPA believes that a more stringent level would be
disadvantageous to U.S. producers, with no added environmental benefit.
If U.S. companies were limited to additional production of less than 10
percent for export to Article 5 countries, producers from other countries
would easily meet the existing demand of Article 5 countries. In other
words, the total potential supply that the Protocol allows all developed
countries to produce for Article 5 countries is much greater than the
demand of all the developing countries that are Parties to the Protocol.
Thus, if U.S. companies do not produce the methyl bromide for Article
5 countries, another Party will. Since the same amount of methyl bromide
will be consumed by the developing countries, whether the U.S. or another
Party produces it, a U.S. reduction in the percent of additional production
would have no environmental impact.
EPA believes it is important that the network of United States exports
of methyl bromide be maintained in order to continue market contacts.
EPA presumes that United States producers will be leaders in developing
alternative pesticides to methyl bromide. EPA believes that it is U.S.
producers of methyl bromide who will quickly develop alternative pesticide
practices, and therefore provide Article 5 countries with the alternatives
necessary to eliminate the use of this controlled substance. The current
international sales networks of U.S. methyl bromide producers will serve
as a conduit for disseminating to Article 5 countries alternatives to
methyl bromide once they are developed.
In today's rule, EPA clarifies that under the current regulations, the
production allowances for Article 5 countries may be retroactive to the
beginning of the control period starting January 1, 1994. The current
regulations refer to control periods and do not prohibit companies from
seeking authorizations for potential production allowances already exported,
as long as that export occurred and the potential production allowance
is used in the same control period.
V. Summary of Supporting Analysis
A. Executive Order 12866
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency
must determine whether this regulatory action is ``significant'' and therefore
subject to OMB review and the requirements of the Executive Order. The
Order defines ``significant'' regulatory action as one that is likely
to lead to a rule that may:
(1) Have an annual effect on the economy of $100 million or more, or
adversely and materially affect a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local, or tribal governments or communities; (2) Create a serious inconsistency
or otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlement, grants, user
fees, or loan programs or the rights and obligations of recipients thereof;
or
(4) Raise novel legal or policy issues arising out of legal mandates,
the President's priorities, or the principles set forth in the Executive
Order.
It has been determined by OMB and EPA that this amendment to the final
rule is not a ``significant regulatory action'' under the terms of Executive
Order 12866 and is therefore not subject to OMB review under the Executive
Order.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601-602, requires that Federal
agencies examine the impacts of their regulations on small entities. Under
5 U.S.C. 604(a), whenever an agency is required to publish a general notice
of proposed rulemaking, it must prepare and make available for public
comment an initial regulatory flexibility analysis (RFA). Such an analysis
is not required if the head of an agency certifies that a rule will not
have a significant economic impact on a substantial number of small entities,
pursuant to 5 U.S.C. 605(b).
EPA believes that any impact that this amendment will have on the regulated
community will serve only to provide relief from otherwise applicable
regulations, and will therefore limit the negative economic impact associated
with the regulations previously promulgated under sections 604 and 606.
An examination of the impacts on small entities was discussed in the final
rule (58 FR 65018 and 58 FR 69235). That final rule assessed the impact
the rule may have on small entities. A separate regulatory impact analysis
accompanied the final rule and is contained in Docket A-92-01. I certify
that this amendment to the accelerated phaseout rule will not have any
additional negative economic impacts on any small entities.
C. Paperwork Reduction Act
Any information collection requirements in a rule must be submitted
for approval to the Office of Management and Budget (OMB) under the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq. Because no additional informational
collection requirements are required by this amendment, EPA has determined
that the Paperwork Reduction Act does not apply to this rulemaking and
no new Information Collection Request document has been prepared.
List of Subjects in 40 CFR Part 82
Environmental protection, Administrative practice and procedure, Air
pollution control, Chemicals, Chlorofluorocarbons, Exports, Hydrochlorofluorocarbons,
Imports, Interstate commerce, Nonessential products, Reporting and recordkeeping
requirements, Stratospheric ozone layer.
Dated: September 30, 1994.
Carol M. Browner,
Administrator.
40 CFR part 82 is proposed to be amended as follows:
PART 82--PROTECTION OF STRATOSPHERIC OZONE
The authority citation for part 82 continues to read as follows:
Authority: 42 U.S.C. 7414, 7671-671q.
Subpart A--Production and Consumption Controls
2. Section 82.9 is amended by revising paragraphs (a) introductory
text, and (a)(1) and (a)(2) to read as follows:
Sec. 82.9 Availability of production allowances in addition to baseline
production allowances.
(a) Every person apportioned baseline production allowances for
class I controlled substances under Sec. 82.5 (a) through (f) is granted
potential production allowances equal to: (1) 10 percent of his apportionment
under Sec. 82.5 for each control period ending before January 1, 2000
(January 1, 2001 for methyl bromide); and
(2) 15 percent of his apportionment under Sec. 82.5 for each control
period beginning after December 31, 1999, and ending before January
1, 2011 (January 1, 2013 in the case of methyl chloroform; except
for methyl bromide which is reserved).
[FR Doc. 94-25200 Filed 10-13-94; 8:45 am] BILLING CODE 6560-50-P
![[logo] US EPA](http://www.epa.gov/epafiles/images/logo_epaseal.gif){kind=logo}